Joint Committee on Deficit Reduction
In November, the supercommittee announced that they failed to reach an agreement regarding how to reduce the deficit by $1.2 trillion over the next 10 years. As a result of the failure of the committee to reach an agreement, the sequestration process was triggered. The sequestration cuts will be implemented in equal increments over a 9-year period, beginning in Fiscal Year 2013.
Unless overridden or amended by Congress, this sequestration mechanism would cause across-the-board cuts in federal government spending, with half of the cuts coming from defense spending and the other half from other government programs including Medicare. Cuts to the Medicare program are capped at two percent. According to initial calculations, the 2 percent cut to physician payments will total $13.49 billion spread out over 9 years.
Because the cuts do not go into effect until Fiscal Year 2013, there is still time for possible Congressional action. For example, Congress could pass legislation to reduce the deficit by the same amount as the sequester, change the cuts associated with the sequester, or eliminate the sequester altogether. Whether or not such changes could be agreed upon is highly speculative, and President Obama has previously threatened to veto any future legislation that changes the sequester cuts. Against this backdrop, ASA will continue to lobby Congress on anesthesiology’s unique Medicare “33 Percent Problem,” highlighting the added pain that could come from the Independent Payment Advisory Board.
The legislation to increase the debt limit by $2.1-$2.4 trillion is now the law of the land and attention has shifted to the Joint Committee on Deficit Reduction (often referred to as the “super committee”). This 12-member committee is comprised of three Democrats and Republicans from the House and three Democrats and Republicans from the Senate. The super committee is tasked by Thanksgiving with developing a plan supported by at least seven members of the committee that includes between $1.2 trillion to $1.5 trillion in deficit reduction (over a ten year period). Congress is then required to take an up or down vote without amendments on the legislation proposed by the joint committee. If the super committee fails to present a plan, or if the super committee’s plan does not reduce the deficit by at least $1.2 trillion, or if Congress fails to pass the super committee recommendations; a process of automatic cuts known as sequestration is triggered. These cuts would start in 2013. This sequestration mechanism would cause across-the-board cuts in federal government spending, with half of the cuts coming from defense spending and the other half from other government programs including Medicare. Sequestration is intended to force action by members of the super committee to avoid significant reductions to spending interests considered important to the respective parties. Time will tell if this strategy prevails.
The deal also requires the House and Senate to vote on a Balanced Budget Amendment. If the Balanced Budget Amendment passes the House and Senate by the two-thirds majority constitutionally required, the entire joint committee process and sequestration are unnecessary. It is highly unlikely the House and Senate can agree on language for the Balanced Budget Amendment, and it is unlikely enough votes are present for the Balanced Budget Amendment to pass both the House and Senate
- Congressional leaders appoint joint committee (JC) members by August 16.
- Joint committee must begin meeting by September 16.
- Between October 1 and December 31, both the House and Senate must vote on a Balanced Budget Amendment.
- Regular House and Senate committees can make recommendations to the JC by Oct. 14.
- JC must submit a report to Congress and the President that is supported by at least 7 of the 12 members by Nov. 23.
- The House and Senate must vote up or down without amendment on the JC report by Dec. 23.
- Current SGR patch expires Dec. 31, 2011.
Members of the Committee
Nine of the twelve members of the committee have already been chosen. The members of the committee are Senator Patty Murry (D-WA), Senator John Kerry (D-MA), Senate Finance Chairman Max Baucus (D-MT), Republican Conference Chairman Jeb Hensarling (R-TX), Ways and Means Chairman Dave Camp (R-MI), Energy and Commerce Committee Chairman Fred Upton (R-MI), Senate Minority Whip Jon Kyl (R-AZ), Senator Pat Toomey (R-PA), former Director of the Office of Management and Budget (OMB) during the Bush Administration Senator Rob Portman (R-OH), Representative James Clyburn (D-SC), Representative Chris Van Hollen (D-MD), and 2011 ASA Legislative Conference speaker Representative Xavier Becerra (D-CA). Senator Patty Murray and Representative Jeb Hensarling will serve as co-chairs of the joint committee.
Medicare Sustainable Growth Rate (SGR)
The timing of the joint committee work is important because it closely correlates to the expiration of the current SGR fix on December 31, 2011. Unless Congress acts, the SGR will result in physician Medicare pays being cut by over 27.4 percent. The final vote on any compromise agreed to by the super committee must occur by December 23, and a little over one week later the 27.4% SGR payment cut will go into effect absent Congressional action to the contrary.
In late December, Congress passed H.R. 3630 that averted the 2012 SGR cuts through the months of January and February allowing for more time to find a longer-term deal.
The “Byrd Rule”
Often overlooked, but not without consequence is the fact that the super committee is not subject to the “Byrd Rule,” which is a long-running rule that forbids deals from including unrelated policy matters in budget language. Lacking this rule, members of the committee could theoretically include any policy or regulatory issue the committee sees fit.
In addition to ASA’s ongoing outreach to key lawmakers and staff regarding Medicare payments for anesthesiologists, ASA will also work to bring our issues to the new special joint committee. Additional advocacy activities will be required to determine how possible changes to Medicare payments to physicians under this package would interact with projected Sustainable Growth Rate (SGR) related payment reductions in the future.
Read the actual legislation
Section by section summary of the legislation
Congressional Budget Office “score”
Flow Chart of the process of raising the debt limit
PowerPoint summary presented by Speaker of the House John Boehner
Analysis by the Democratic Policy and Communications Center
ASA Letter to Joint Committee
11-21-2011 - Supercommittee Failure Forces Two Percent Physician Payment Cut in 2013
10-14-2011 - ASA to Supercommittee: Protect Anesthesiologists' Payment and Repeal IPAB
09-02-2011 - Joint Debt Committee Schedules First Hearings
08-11-2011 - Joint Committee Members Named
08-03-2011 - Debt Limit Deal Struck - Medicare Cuts Possible